BlackRock's Rick Rieder is not scared of stocks

Stock prices are trading at record levels with valuations stretched to levels we haven’t seen since the dotcom bubble. Does that scare BlackRock’s Rick Rieder?

“Not at all,” he said. “Not at all.”

Rieder, BlackRock’s Global CIO of Fixed Income, explained during Yahoo Finance’s All Markets Summit on Wednesday that he’s looking at the stock market relative to the bond market, where historically low interest rates are incentivizing investors to move money out of bonds and into stocks. Critically, investors are doing this because the low yields offered by the bond market just aren’t generating the kind of income that investors, including retirees, need.

Rick Rieder at Yahoo Finance’s All Markets Summit.

“Given the dynamic that there’s not enough … income in the world. There’s not enough cash flow in the world today,” he said. “If you take all of the coupon flow off of Treasuries, German bunds, Japanese JGBs — coupon flow, not even where rates are, what the coupon is in the portfolio — it doesn’t equate to the top five companies in the S&P 500. Meaning the cash flow sits in the equity market today.”